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Each year, millions of Americans discover they owe taxes they can't afford to pay. Many manage to arrange payment plans with the IRS or tax solution companies, but still, millions find themselves unable to pay their taxes. If you’re in this situation and want to pay but can’t afford it right now, you can request Currently Non-Collectible (CNC) status from the IRS.
A taxpayer falls behind on filing returns or paying taxes. The IRS starts its collection process, which can include calls, visits, wage garnishment, or bank account seizures. If you can prove that paying your tax debt would cause undue economic hardship, you may qualify for CNC status, halting the IRS’s collection efforts.
Getting CNC status isn’t simple. You must demonstrate to the IRS that paying your tax bill would significantly and negatively impact your life. This requires thorough documentation of your assets and income. If the IRS discovers hidden funds or significant income, you might not qualify for CNC status and might need to consider a payment plan instead.
CNC status isn't permanent. If your financial situation improves, the IRS will resume collection efforts. During CNC status, penalties and interest continue to accrue. The IRS will regularly review your financial situation through your tax filings. If you maintain CNC status for a full 10 years, the IRS may write off your debt.